Uzbekneftegaz (Uzbek Oil and Gas) and Korean KOGAS plan to build some US$1.5 billion worth gas chemical plant by 2010, and launch joint processing of gas from the Surgil field in Ustyurt region of Uzbekistan, Reuters quoted a source in Uzbekneftegaz.

This year, the companies intend to set up a joint venture on parity basis and start the construction of the gas-processing plant in 2008. The field, reportedly, has the confirmed deposits of 84 million tonnes of liquefied natural gas.

The plant will specialize in the production of ethylene, as well as 360,000 tonnes of polyethylene and 80,000 tonnes of polypropylene yearly. For the construction of the plant, KOGAS will appropriate investments in the amount of some US$1 billion. The rest will be contributed by Uzbekneftegaz and bank loans.

After processing, the gas will be transported using the existing pipeline system and exported, the source at Uzbekneftegaz specified.

The agreement on the implementation of the project was reached in March 2006.

At the same time, KOGAS has agreed on the joint development and extraction of natural gas on the Uzunkui-Tuaryk investment block with the estimated deposits of 191 million tonnes of liquefied natural gas.

Uzbekistan, after Turkmenistan, is the largest producer of natural gas in Central Asia, extracting over 60 billion cbm of gas yearly. Tashkent is currently working to develop cooperation on several large projects on exploration, extraction and transportation of hydrocarbons with China and Russia.